How Much do you Know About Your Credit Cards

Every one I know has at least one credit and most people have multiple credit cards. Even though, we know we should only use them if we have the ability to pay them off quickly or in case of emergency, we find ourselves swiping the card for purchases that are not necessary and often for items that we can't afford. Why do we do this? How have credit cards become such a large part of American society? The ability to purchase an item now and paying for it later costs Americans billions of dollars. How much are you credit cards costing you???

On average Americans have over six credit cards with an average balance of $2,500 on EACH card, over $17,000 in credit card debt!!! In total Americans have over $9 BILLION in credit card debt!!!

If you make the minimum payment on a credit card with $2,500 it will take you over 20 YEARS TO PAY IT OFF!!! With a total cost of OVER $5,800!!! You borrowed $2,500 and you paid $5,865.51, and if you are the average person and have 6 credit cards you will pay $35,193 to pay off your credit card balances of $17,500...how does this make sense??? Would you be willing to pay $93.84 for a pair jeans, when the store is selling the same jeans for $40.00? No? This is exactly what you are doing when you purchase an item using your credit card and can't pay off the balance quickly. So next time when you think of purchasing an item (and you can't afford it), before pulling out the credit card, ask your self if you are willing to pay more than double for that item.

What about the transfer game? I know a lot of people that think they have the credit card companies fooled, they transfer their balances to a low or no interest card to save money. However, this is what credit card companies want you you to do. They know most consumers don't read the small print and/or review their statements closely every month. Did you know, most of these offers require to use you card at least once a month (and the new purchases have a different, higher interest rate) just to keep the promotional rate? Or if you are even one day late they will charge you a much higher rate on your balance (18%-30%).

Even if you are able to maintain your great rate, you can still fall in to the credit card companies trap. Typically, they will lower your minimum payment to entice you to make a lower payment during your promotional period, therefore, paying off less of your balance. In addition to paying off less of your balance, the credit card companies know that a majority of us will use our credit cards more now that our monthly payments are lower, raising our balance and making them more money in the long term.

Like Vegas, the house always win, so don't play with your credit cards unless you can pay off the balance at the end of the month or it's emergency and you don't have any other options.


Prosperity Financial, LLC
Lafayette, CO
http://www.myprosperityfinancial.com/
http://www.colomortgages.com/

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